The Style Of Light Assets Of Hai Lan'S Home

600398.SH, known as "man's Wardrobe", has been in constant twists and turns in recent years.
Following the April annual shareholders' meeting, chairman Zhou Jianping, after angry small shareholders, the news of the suspected black whale HLAJEANS suspected of plagiarism in May aroused heated debate. The 9 month Hai Lan House transferred the 100% stake of the women's clothing brand AI Ju rabbit.
At the same time, although Hai Lan home's announcement from December last year, the share price of the buyback company continued to be sluggish, and it has been in a state of decline since the general meeting of shareholders in April.
The performance of Hai Lan's home is also very worrying. In the first half of 2019, the revenue growth of Hai Lan home was significantly lower than that of the same period last year. The net profit growth rate has been the lowest since the listing, and the net cash flow of operating activities has dropped by 40.60% compared with the same period last year.
Behind a series of bad news, Hai Lan's home has always been proud of the "Hai Lan home" model encountered unprecedented bottlenecks. This mode of light assets will outsource production links, and stores will be mainly franchising, thus boosting the rapid expansion of Hai Lan's home scale. But after expanding to a certain scale, the growth of Hai Lan's home is slow, accompanied by single store revenue decline, inventory pressure and other issues become more prominent.
　　 "Hai Lan mode" meets bottleneck
From 2015 to now, the growth of revenue and net profit of Hai Lan's home has been slowing down. The growth rate in recent three years is only one digit.
The so-called "Hai Lan mode" is a light asset operation mode.
In the upstream, Hai Lan's home will outsource the production process, and get goods from the supplier on credit, and with goods that can be returned. The unsalable goods can be returned to the supplier at cost price, so the stock is not prepared for the depreciation of inventory. For non returnable goods, Hai Lan's home is responsible for the corresponding risk of inventory depreciation.
In the lower reaches, the so-called franchisee is only the role of financial investors, is only responsible for paying the relevant operating costs, do not have to participate in the specific operation of the franchisee, the internal management of all stores entrusted Hai Lan's home to be fully responsible, and the inventory risk is also borne by the sea Lan's home. Sales revenue is divided by the proportion of Hai Lan's home and the franchisee.
The "advance" supplier's payment and the franchisee's affiliation fee have successfully reduced the heavy assets, boosted the rapid expansion of Hai Lan's home, and also allocated inventory risk and financial risk to suppliers and franchisees. The operation mode of this light asset led Zhou Jianping, chairman of the board, to be proud of it, and argued at the shareholders' meeting that "no one else could learn".
In 2014, Hai Lan home's reverse takeover of Keno technology successfully went on the market. At that time, its revenue was 12 billion 338 million, its net profit was 2 billion 375 million, and its revenue and net profit growth exceeded 70%. Under this mode, its net interest rate as high as 19% and the net asset yield of 40% have made it difficult for many listed companies in the clothing industry to keep a close eye on it.
But when the expansion reached a certain extent, Hai Lan's home gradually entered the bottleneck period. From 2015 to now, the growth of revenue and net profit of Hai Lan's home has been slowing down. The growth rate in recent three years is only one digit.
More importantly, the number of stores in Hai Lan's home has been growing at a high speed, but its performance has always been sluggish. Data show that in 2018, Hai Lan's new store opened 1181 stores, closing 300 stores, with a net increase of 881, an increase of 15.2% over the same period last year. This year, Hai Lan's home revenue was 19 billion 90 million yuan, an increase of 4.89% over the same period last year. Net profit was 3 billion 455 million, the growth rate was only 3.78%.
Behind this, the revenue and profitability of a single store are constantly sliding. According to the financial report data, the average revenue of various stores in Hai Lan's brand stores has been declining for 12 months or more. Among them, the main brand "Hai Lan home" in 2018 alone store revenue was only 7 million 517 thousand yuan, down more than 65% over the same period.
With the rapid growth of shop opening, the performance of Hai Lan's home has not improved. And it is likely to be unsustainable. On the one hand, with the decline in the efficiency of single stores, the number of franchisees and the initiative of prepayment may decline. On the other hand, suppliers who feel risk may also refuse to sell on credit and take inventory risks.
　　 Product short board to be filled
Under its light asset mode, suppliers are different from the general foundry, which allows both credit sale and inventory risk.
The essence of the "light asset mode" of Hai Lan's home is to make rapid expansion of its scale with the funds of suppliers and franchisees by virtue of its brand power and supply chain capability. But all this is the premise of the product's best-selling, if there is no guarantee of sales, a larger scale will only bring greater trouble and risk, inventory risk is one of them.
Because the franchisee does not bear the risk of unsalable, the inventory of Hai Lan's home includes both the stock of the company's warehouse and the goods that the store does not sell. This brings huge inventory pressure to them.
In the 2015-2018 year, the inventory balance at the end of the year was 9 billion 580 million, 8 billion 630 million, 8 billion 490 million and 9 billion 470 million respectively, and the share of inventory accounted for 60.5%, 50.7%, 46.6% and 49.6% respectively.
Although in the light asset mode, Hai Lan's home can shift part of the inventory pressure to the upstream suppliers. For example, the 2018 annual report shows that in the end of the Hai Lan home's clothing chain brand inventory, the amount of goods returned can be 4 billion 920 million, accounting for 55.8%. But Hai Lan's home still faces enormous inventory pressure.
According to the annual report, the loss of assets of Hai Lan home in 2018 was 380 million, up 203% from last year. This loss engulfed Hai Lan's home, which resulted in the growth of a sluggish profit.
It is worth noting that Hai Lan's stock price reserve for the main brand of Hai Lan's home is less than 2 years, which is set at 0. This standard is too loose relative to clothing, especially fast fashion clothing. This also means that the risk of inventory at Hai Lan's home may be greater than that on the surface.
According to the data, the inventory turnover time of Hai Lan's home in 2018 was 286 days, far greater than that of Semir clothing (129 days), seven wolves (162 days) and Mei Bang dress (208 days) in the same industry.
The main reason for the decline in sales volume and high inventory is in addition to the depressed environment in the clothing consumption market (the National Bureau of statistics data show that in 2018, the sales of clothing in China dropped by 24.8% over the same period last year), it may still be ignored by Yu Hai Lan's home for the products themselves.
Although Zhou Jianping himself once said at the shareholders' meeting that "the designers at the highest level are all in the home of Hai Lan", their input in product R & D design can be clearly seen from financial data. In 2017 and 2018, the R & D cost of Hai Lan's home was only 25 million 40 thousand and 49 million 20 thousand, which accounted for 0.14% and 0.26% of revenue respectively, far less than that of Smith Barney's clothing and Semir clothing. The R & D expenses of the two enterprises in 2018 were 156 million and 364 million, respectively.
In addition, under the light asset mode, suppliers are different from the general foundry factories, which not only allow credit sale, but also assume the risk of inventory, and have more discourse power for design. The original design of Hai Lan's home can not occupy the leading position.
Aware of the lack of growth, Hai Lan's home has made a series of adjustments in the past two years, including changing the spokesperson to create a new product style, and working with the famous menswear designer Zhou Xiangyu to sign the famous IP, such as "havoc heavenly palace" and "World of Warcraft". However, the design and development of products is a relatively long term work. The effectiveness of these efforts still needs time verification.